TIOL-DDT 507 · the untouched capture
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#663399" size="3">TIOL-DDT
507</font><br>
07. 12. 2006<br>
Thursday</b></font></p>
<p align=center><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">Failure
to file Income Tax return – imprisonment up to seven years – not very harsh?
Jayalalitha in trouble </font></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This
is not a good season for politicians. We are not bothered. DDT is all about
taxes, not politics. There was a time when tax weapon was allegedly used against
political opponents. Politicians had to hire good accountants to keep their
accounts in order and ready to face a ‘raid’ once they lose power. But inflation
and liberalization contributed to a relaxed era where not an eyelid is raised
if a politician is found to have a couple of hundred Crores. But sometimes the
law does catch up. The income tax department initiated prosecution proceedings
against AmmaJayalalitha in May 2004. By a strange coincidence, that was around
the time her party badly lost the LokSabha elections. Troubles and taxmen usually
come together. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">What
are the consequences of (wilfully) not filing an Income Tax return? Simply,
imprisonment which may extend up to seven years- and not simple imprisonment
but rigorous imprisonment. And who is to prove whether the lapse was wilful
or not? Normally prosecution should prove <i>mensrea, </i>but not in Income
Tax. If the return is not filed, it is deemed as wilful. Draconian?Unfair? Unconstitutional?
.Jayalaitha thought so, but the Madras High Court did not. In a classic judgement
delivered last Saturday, the High Court dismissed her petition challenging the
provisions of the Income Tax Act. The judgement is a treatise on important legal
issues like mensrea, presumption, and is a <i>must read</i> for every student
of law. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Incidentally
do you remember Babu Jagjivan Ram had forgotten to file his income tax returns
for 11 years!</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We
bring you the highlights and the full text of the High Court order today. Please
see <u><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=38&filename=legal/hc/2006/2006-TIOL-372-HC-MAD-IT.htm">Jayalalitha
v UOI. </a></u></font></p>
<p align=center><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#006600">Handmade
biris; machine made labels – Board clarifies</font></b></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Biris
made without the aid of machines is classified under SH 2403 10 31. But what
happens if the labels/wrappers are machine made (as obviously they are)?. The
Board has now clarified the issue. Board notes the fact that the Tribunal had
in 1997 in the <i>Ajanta SadaBiri Co</i> case had held that where labels were
manufactured by job worker with the aid of machines, the biris will still be
considered manufactured without the aid of machines. The Board circular states,
<font color="#663399">“After taking into account the various judicial pronouncements
and the fact that rolling and other processes involved in the manufacture of
biris per se are not carried out with the aid of machines, the Board is of the
view that in such circumstances, it is legal and proper to classify such biris
manufactured without the aid of machines under Tariff item No 2403 10 31, even
if the labels/ wrappers are manufactured with the aid of machines”</font></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Incidentally,
the Board forgets to mention that they had gone in appeal against the above
mentioned Tribunal order which was dismissed by the Supreme Court of India as
time barred in 1999 with the observation, <font color="#663399">“There is a
delay of 359 days in filing the appeal for which no satisfactory explanation
is forthcoming.”</font></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It
took the Board 359 days to appeal against the order to take poor biri manufacturers
that too handmade biris and after they failed in that mission, it took them
seven long years to clarify that Tribunal was after all right. And perhaps litigation
was merrily going on all these years, but as they say better late that never.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=31&filename=notification/excise/2006/excircular840.htm">CIRCULAR
No. 840/17/2006-CX.,Dated: December 6, 2006</a></font></p>
<p align=center><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#006600">Exim</font></b><font color="#006600"><b>
Bank credit to Myanmar – RBI instructions</b></font></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The
Exim Bank has concluded an agreement with the Myanma Foreign Trade Bank extending
a Line of Credit for USD 20 Million for financing export of goods and services
from India, including consultancy services, for renovation of the Thanlyin Refinery
in Myanmar. RBI informs that the agreement is effective from October 23, 2006
and</font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++
Shipments under the credit will have to be declared on GR / SDF Forms as per
instructions issued by Reserve Bank from time to time.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++
No agency commission is payable under the above line of credit. However, if
required the exporter may use his own resources or utilise balances of his
EEFC account for payment of commission in free foreign exchange.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++
Authorised Dealer Category-I (AD Category-I) banks may allow such remittance
after realisation of full payment of contract value.</font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><u><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=49&filename=notification/rbi/2006/rbi06cir019.htm">CIRCULAR
NO.</a></u><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=49&filename=notification/rbi/2006/rbi06cir019.htm"><u>
19/RBI., Dated: December 6, 2006</u></a></font></p>
<p align=center><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#006600">Custom
House Agents Exam on </font></b><font color="#006600"><b>29.12.2006</b></font></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The
date for next examination of Custom House Agents under Regulation ‘8’ of Custom
House Agents Licensing Regulations, 2004 has been fixed on 29.12.2006 from 10.00
A.M. to 1.00 P.M, according to Public Notice No.:06/2006 Dated: 05.12.2006 of
the Commissioner of Central Excise , Madurai.</font></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until
tomorrow with more DDT </font></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have
a nice day. </font></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Mail
your comments to</font> <font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a
href="mailto:vijaywrite@taxindiaonline.com">vijaywrite@taxindiaonline.com</a></span></font></p>
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